HUNDREDS of jobs have been saved after a deal was struck to save Grangemouth petrochemical site.

Ineos announced on Wednesday it would shut the petrochemical arm of the central Scotland facility, with the potential loss of 800 jobs.

But this morning it was announced the site would remain open, but with some limited redundancies, after Unite made a "dramatic U-turn" according to Ineos.

The union agreed to a pay freeze, the ending of the final salary pension scheme and no strikes for three years, as well as other changes to terms and conditions.

Ineos had said it would close the site, which employs 800 employees, after workers refused to sign up to the changes.

But it said it would immediately reopen the site and the adjoining oil refinery, which have been shut down for the past week as a result of the dispute.

A number of contractors have been laid off or switched to other sites.

Len McCluskey, general secretary of the Unite union, [REUTERS]

Thank goodness people finally came to their senses. Grangemouth now has a great future.

Jim Ratcliffe, the chairman of Ineos Group

Jim Ratcliffe, the chairman of Ineos Group, said: "This is a victory for common sense. Unite advised employees to reject change and vote for closure.

"Thank goodness people finally came to their senses. Grangemouth now has a great future."

There were cheers of joy and relief yesterday as the news was given to around 800 workers crammed into the site's restaurant, where there had been very different scenes on Wednesday.

There were apologies on both sides and signs of a shift in relations between the two sides warring sides as the happy news broke.

Workers cheered each sentence as Ineos chairman Calum MacLean pledged no closures, a £300m investment and government deals to save the plant's future.

After the emotional 10 minute meeting, Rachel Morell, who has worked in the site's petrochemical plant for 12 years and who faced losing her job, said: "Everyone was very happy, there were big cheers and clapping. Everyone was just extremely grateful.

"Anyone who had heckled before was apologising.

"Hopefully this will go some way to mend things between staff and management."

One man, a contractor at Grangemouth, said: “Everything that Calum said received a cheer.

"Every sentence received a cheer, it was really great, we weren't expecting everything to get started back up because these plants are vulnerable, most of them are aging structures so these vulnerabilities probably in the longterm do not make good business sense, but we've been given given the green light to start up, £300m investment."

Politicians from the UK and Scottish governments have been pressing the two sides to break the deadlocked row, warning of the grim impact on the economy if the plant had closed.

Unite's general secretary Len McCluskey met shop stewards and managers at Grangemouth yesterday after announcing that the union had decided to "embrace" the survival plan.

Ineos has said the site is losing £10 million a month.

Calum MacLean, Grangemouth chairman said: "Unite risked 800 jobs and one of the UK's largest manufacturing facilities over a union official investigation before any verdict had been announced.

"It then advised employees to reject the change essential to the survival of Grangemouth. Today's U-turn means Grangemouth now has an excellent future."

Ineos said in a statement: "Unite's withdrawal of its opposition to the company's survival plan , which was already supported by 50% of employees on the site, has allowed the shareholders to invest a further £300 million in the company.

"This money will be used to fund ongoing losses and to finance the building of a gas terminal to bring in shale gas ethane from the USA.

"The Scottish government has indicated it will support the company's application for a £9 million grant to help finance the terminal and the UK Government has given its prequalification approval for a £125 million loan guarantee facility."

Pat Rafferty, Unite Scottish secretary welcomed the decision, and said: "Relief will ring right round the Grangemouth community, and across Scotland today. Hundreds of jobs that would have been lost can now be saved and £300m will be invested into the plant.

"Grangemouth is the powerhouse of the Scottish economy - it now has a fighting chance of upholding this crucial role into the future

"Obviously today's news is tinged with sadness - decent men and women are being asked to make sacrifices to hold onto their jobs, but the clear wish of our members is that we work with the company to implement its proposals.

"Unite has worked tirelessly to save Grangemouth because we are totally committed to this plant and its incredible workforce. We will now sit down with Ineos to consult on the company's proposals."